Tata Capital Approves ₹650 Crore Rights Issue For Housing Finance Arm
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Tata Capital will infuse ₹650.02 crore into Tata Capital Housing Finance through a rights issue to support growth and strengthen capital
Tata Capital Housing Finance Limited (TCHFL) has approved a rights share issuance of ₹650.02 crore to its parent company, Tata Capital Ltd.
The housing finance arm will issue equity shares with a face value of ₹10 each to its parent company, with the fundraising planned in one or more tranches.
The objective is to power the growth of one of India's leading housing finance companies, which has recorded strong AUM expansion and good asset quality.
Tata Capital shares closed 1% down at ₹334.15 on the BSE on 25 February, post the announcement, against a flat Sensex.
How Did Tata Capital Perform In Q3 FY26?
Net Profit | ₹790 | ₹660 | +19.7% QoQ |
Net Interest Income (NII) | ₹2,541 | ₹2,302 | +44% QoQ |
Additionally, Tata Capital’s net total income saw a 33% year-on-year rise from ₹2,711 crore in Q3FY25 to ₹3,594 crore in Q3FY26.
How Did The Arm Perform In Q3 FY26?
Assets Under Management (AUM) | ₹81,600 crore | Up 30% YoY, faster than group growth |
Profit After Tax (PAT) | +25% YoY growth | Supported by steady lending momentum |
Cost-to-Income Ratio | 31.8% | Improved by 114 bps, reflecting tighter cost control |
Return on Assets (ROA) | 2.4% | Stable across all FY26 quarters |
Credit Cost | 0.1% | Indicates controlled risk and a stable portfolio |
Net Non-Performing Assets (NNPA) | 0.4% | Healthy asset quality maintained |
This performance reflects that Tata Capital Housing Finance Ltd. (TCHFL) was able to generate consistent growth, keep asset quality high, and at the same time, enhance operating efficiency even during the recent quarter.
What Is The Purpose Behind This Infusion?
- Support faster loan book expansion as housing finance AUM grows ahead of the group average.
- Strengthen regulatory capital buffers and maintain balance sheet stability.
- Provide flexibility to scale lending without increasing leverage.
- Back digital and operating efficiency initiatives highlighted by management.
- Reinforce Tata Capital’s long-term commitment to its housing finance business.
Rajiv Sabharwal, Managing Director and CEO of Tata Capital, said while speaking with analysts after the third quarter results, that they are confident of maintaining this momentum as the company stays focused on expanding the housing finance business while protecting margins through disciplined execution.
He noted that unsecured retail disbursements, which had been scaled back earlier as a precaution, are gradually picking up again while slippages continue to decline.
He also added that the company’s distribution reach and continued investment in digital tools and GenAI initiatives are helping improve operating efficiency.
What Investors May Watch Ahead?
Investors will closely watch if the new funds can really keep the loan growth going without compromising asset quality and margins.
Profitability in the future may also be affected by changes in credit costs, non-performing assets and interest rates.
Besides that, the market participants may observe the company's efficiency in using new equity to fortify its market position in a highly competitive housing finance sector, where both pricing discipline and execution are going to be key factors for ensuring a stable performance.
Sources:
The CNBC TV18
NDTV PROFIT
THE FREE PRESS JOURNAL
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
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